Fox v. Curtis
Fox v. Curtis
Opinion of the Court
Opinion by
George Fox and J. A. Curtis were partners in the wholesale shoe business. On July 12, 1895, Curtis confessed two judgments in the firm name, one for $4,500 and the other for
The order made by the learned judge of the common pleas preserved the partnership property from waste, and promoted the interests of the individual partners and of the general creditors. It is so manifestly wise from a business point of view and so just to all parties concerned that it should be sustained unless it is in violation of the rights of the first assignee and of the creditors preferred by that assignment.
The partnership was insolvent and had a number of creditors. The assignment by Curtis was of all the partnership property winch had not been taken in execution. It transferred to a third party for the benefit of two creditors, who had already secured a lien on all of the property subject to levy and sale, book accounts amounting to more than double the amount of their claims. It placed the property transferred beyond the reach of creditors, and charged it with a trust for the payment of particular debts. Under our cases it must be treated as an assignment for the benefit of all of the creditors, the preferences being void: Watson v. Bagaley, 12 Pa. 164; Wiener v. Davis, 18 Pa. 331; Lucas v. Sunbury & Erie Railroad Co., 32 Pa. 458; Appeal of Miner’s National Bank, 57 Pa. 193; Wallace v. Wainwright, 87 Pa. 263. But if the assignment can be sustained as a general assignment the property assigned was vested in the trustee, and could not be taken from his control and placed in the hands of a receiver. Had Curtis power to make the assignment ?
Generally in commercial partnerships the implied agency of a partner is limited to matters within the range of the ordinary
This is in harmony with the general trend of decisions elsewhere. In the notes to Livingston v. Rosevelt, 1 American Leading Cases, 547-551, the learned editors say that, while there seems to be some conflict of opinion on the question whether one partner has a right to make a general assignment to a trustee for the payment of the debts of the firm, the cases may be arranged under two heads: — those which hold that a partner has no such power, and those which hold that he has the power in the absence of the other partner and when acting in good faith for the benefit of the partnership; that there is no American case which decides that one partner, when the
The assignment being void, the case presented called for equitable intervention. The attempted transfer by one of the partners was in violation of the rights of the other and of the partnership agreement; if it did not work an actual dissolution of the partnership, it stripped it of all its property and made it impossible to continue the business. The appointment of a receiver is in the discretion of the court, not to be exercised arbitrarily or, as was said in Oil & Mining Co. v. Petroleum Co., 57 Pa. 83, doubtingly, but only when it is clear “ that it is needful and is the appropriate means of securing a proper end.” In this case it was the only adequate remedy by which the interests of all parties concerned could be preserved.
The decree of the court is affirmed at the cost of the appellants.
Reference
- Full Case Name
- George Fox v. J. A Curtis, E. H. Flick, Trustee, and J. H. Fiske, Trustee
- Cited By
- 2 cases
- Status
- Published
- Syllabus
- Partnership — Assignment for creditors — Preferences. Where an insolvent partnership assigns its property to a third party for the benefit of two of its creditors only, the preference in the deed of assignment will be void, and the assignment will be considered a general one for the benefit of all creditors. Assignment for creditors — Right of one partner to make assignment. One partner cannot make a general assignment in trust for the benefit of creditors against the consent or without the concurrence of his copartner if the latter is present and capable of acting in the matter. Partnership — Assignment for creditors by some of the partners. Generally in commercial partnerships the implied agency of a partner is limited to matters within the range of the ordinary business of the partnership. Where by implication the agency has been extended so as to include the power to make an assignment of the partnership property to a trustee for the payment of debts, the facts have been so exceptional as to take the cases out of the general rule. Per Pell, J. Receivers — Appointment of — Discretion of court. The appointment of a receiver is in the discretion of the court, not to be exercised arbitrarily or doubtingly, but only when it is clear that it is needful and is the appropriate means of securing a proper end. One of two partners when the partnership was insolvent confessed judgment to two of the firm creditors, and after execution had been issued under the judgment assigned all of the firm’s property not levied upon to a third party in trust for the two creditors to whom the judgments had been confessed. Subsequently the other partner assigned the same property to another person in trust for creditors. The second partner subsequently filed a bill in equity to restrain the assignee of the first partner from exercising any power under the assignment to him, and praying for the appointment of a receiver. Held, that a decree appointing a receiver was proper, inasmuch as it was the only adequate remedy by which the interest of all parties concerned could be preserved.